REV95620

• Permit No: C1996083
• IBM Index Class Name: Revision
• Doc Date: 2/26/2007
• Doc Name: Cost Estiamte
• From: Jim Stark
• To: Joe Dudash
• Type & Sequence: TR45
• Media Type: D
• Archive: No

STATE OF COLORADO
DIVISION OF RECLAMATION, MINING AND SAFETY
Department of Natural Resources
1313 Sherman St., Room 215
Denver, Colorado 80203
Phone: [phone]
FAX: [phone]
INTEROFFICE
MEMORANDUM
TO: Joe Dudash
FROM: Jim Stark- ~'
SUBJECT: Bowie No. 2 Mine TR-45 Cost Estimate
DATE: 26 February 2007
COLORADO
DIVISION OF
RECLAMATION
MINING
- &-
SAFETY
Bill Owens
Governor
Russell George
Executive DireROr
Ronald W. Cattany
Division Director
Natural Resource Trustee
Attached is the reclamation cost estimate for Bowie No. 2 Mine's Technical Revision 45
- Gob Pile #3. The estimate is eight tasks (a summary sheet and tasks 181-187) and
represents an increase in liability of $414,958.00. This is ($277,364.00 more than the
$137,594.00 estimate submitted by BRL. The reasons for the large difference are
detailed below.
First, BRL does not include a cost for spreading and compacting refuse at Gob Pile #3. It
is a standard practice to include the costs for spreading and compacting one year worth of
refuse production. Based on historic refuse production and the operator's estimated life
of Gob Pile #3, the Division estimated one year's worth of production to be 200,000
yards of refuse. The costs for spreading and compacting the refuse are $68,632.00 and
$17,717.00, respectively (for a total of $86,349.00).
Second, BRL's estimate for replacing the four feet of cover on Gob Pile #3 is $36,362.00
lower than the amount estimated by the Division ($70,083.00 for BRL vs. $106,445.00
for the Division). BRL uses a unit cost based on similar work at the Bowie No. 1 Mine.
Based on the Division's calculated amount, the unit cost BRL used is too low. There
could be several reasons for this, including an outdated value or a shorter haul distance.
Third, BRL's per acre cost for reseeding Gob Pile #3 is low. BRL uses a standard cost of
$1,000.00/acre. The actual cost, including reseeding due to vegetation failure, is
approximately $4,200.00. This leads to BRL underestimating the reseeding cost by
$80,383.00 ($25,000.00 for BRL vs. $105,383.00).
Finally, based on increased direct costs, the Divisions indirect costs ("Burden in the BRL
estimate) are $68,974.00 more than BRL's ($17,947.00 for BRL vs. $86,921.00 for the
Division).
Office of Office of
Mined Land Reclamation ARive and Inactive Mines